There are other options, of course. Businesses can become partnerships and as we know very well at ICS Accounting, many contractors like the security of an umbrella solution. All the same, incorporation is almost expected to happen at some point.

But what’s the right time to make that decision? What should you consider?

Key Factors

Complexity

Sole tradership is very straightforward. Tax obligations are relatively simple, reporting is comparatively easy, and you don’t even technically need a separate business bank account (although setting one up as soon as possible is still highly recommended).

It’s often the case that experienced sole traders are keeping the records to the same level of detail that limited companies have to, but even then the tax liabilities and opportunities are different. The level of administrative burden can also be very different, although as in many cases both types of business outsource complex administration to accounts and the like, this can be less of a factor.

Taking Payment

There are radically different structures for dealing with your own individual income between business structures. These affect both how much it’s likely you can draw based on your income and what your tax looks like.

In particular, once a sole trader reaches higher rates of income tax, the rate is much higher than a limited company owner will tend to deal with.

Privacy & Risk

Much more information is disclosed to Companies House for a limited company than has to be public for a sole trader. In addition, limited company owners and directors bear much less personal responsibility for personal debts due to limited liability, while a sole trader is the same entity as their business.

Perception

One thing you may find as a sole trader is that investors and clients will sometimes shy away from a sole trader. Whether that’s concern over financial liability or perception of how seriously the two types of business are taking it is a much more complex question, but to some extent it’s irrelevant – it’s still something to take into account.

When Should You Make the Change?

While there’s no hard and fast rule, there are a number of things to think about.

Most crucially, if you’re working with large sums or if your earnings are getting high, the liability risk means you should be thinking about this earlier than other business owners might.

Incorporation is also often done at the start of a planned period of growth, so that one complication can be brought out of the way ahead of time.

However if your business is part-time or you’re working in a trade, the sole trader model will likely be appealing for a lot longer due to the straightforward nature and reduced admin time.

If you’re uncertain whether your current plans should be making you think about incorporation, why not drop us a line? We’ll be happy to give you specific advice.

The post When Should You Incorporate? first appeared on ICS Accounting.

So what records will HMRC want to see, what other records are useful to have, and how can you best manage them?

Financial Record Keeping Fundamentals

To run a successful business (and for HMRC’s purposes), you will want to be able to track all money coming into your business, all your expenses (and other costs) and you will want to be able to provide supporting documentation.

Let’s break that down.

Recording Income

All money coming into your business must be recorded or your tax return cannot be accurate and complete. Internally, it’s obviously also important to keep track of all money accrued, whatever the source of the income or the payment method (bank transfer, cash, online payment platforms, etc.)

If HMRC can identify missing income, this is one of the most common reasons for an HMRC inquiry, which makes complete and accurate records of your income vital.

Recording Expenses

Allowable expenses for your business can be claimed against your tax liability. These will be costs incurred exclusively in the process of running your business; rent, phone bills, marketing, advertising, etc.

Which expenses are allowable, and to what extent, can vary according to the type of business. As always, if you’re not sure which expenses would apply, we highly recommend you get in touch with an accountant who can discuss your case specifically.

Payroll Records

As the name itself suggests, payroll comes with a record in the payroll itself. While these are not allowable expenses, they are still key outgoings. HMRC submissions will require payroll for your salary as an owner-director and for salaries and wages paid to any staff you employ.

We’ve written several times on things to watch out for in payroll, including this list of common payroll errors to avoid.

VAT Records

If your business is registered for VAT (and the chances are good that it is), you’ll also need to track your input and output VAT, with records of how that all happened, as the basis of your VAT returns.

Supporting Documentation

For as long as you keep your financial records, you should also retain relevant supporting documentation. There are certain minimum periods your business should retain records for:

• Payroll/PAYE Records should be kept for at least three years after the end of the tax year
• Limited companies should keep financial records for at least six years beyond the end of the relevant accounting period
• VAT Records should also be retained for at least six years
• Sole traders and partnerships should retain records for a minimum of five years after the 31^st January deadline

That supporting documentation might include:

• Sales invoices, bank statements, payment confirmations, etc.
• Receipts and invoices, petty cash records, and purchase or order confirmations
• Contracts, insurance documentation, rental agreements, loan details, and any legal or HMRC correspondence that may be relevant
• Employee personal details and contracts, PAYE and National Insurance contributions (NICs), and pension scheme records
• VAT invoices and credit notes receiver and issued
• Any other items directly or indirectly related to income, outgoings, or eligibility for tax opportunities

The Good News

The Making Tax Digital initiative and MTD-compliant accounting software is making it easier and easier to upload and store these records digitally, meaning that it’s easy to store and refer to these. However, it’s worth remembering that it’s one thing to keep your records up to date; understanding what they mean is a different skill.

If you need any support in interpreting your records or determining what may or may not be an allowable expense (or if you want to outsource your payroll) we at ICS Accounting are here for you.

The post What Records Should You Keep? first appeared on ICS Accounting.

What is Insurance Premium Tax?

As the name suggests, insurance premium tax is a tax designed to raise revenue from the insurance industry. It exists because, at the time it was introduced, a European Union law meant that the simpler solution (applying VAT) was not possible for this industry.

For the most part, IPT is invisible because it is built into the cost of your insurance. That’s also why it doesn’t get discussed very often, which is why when people outside the insurance industry find out about it, IPT can come as a surprise.

What Are the Current Insurance Premium Tax Rates?

For most things, IPT is taxed at the standard rate, which is 12%.

A higher rate applies to certain types of vehicle insurance as well as all travel and electrical appliances insurance. That higher rate is, at the time of writing, 20%, which happens also to be the standard rate for VAT.

What is Exempt from Insurance Premium Tax?

As always, any list of exemptions provided in this blog may leave you wondering if yours is an edge case. We would usually direct you to contact us for a discussion but in this case you can rest assured it will be taken care of by your insurer.

In general, for a business:

• Re-insurance
• Insurance on commercial ships or aircraft
• Insurance on commercial goods in international transit
• Premiums concerning risks located outside the UK
• Most long-term insurance

Are all exempt from IPT, and therefore you may be able to find policies for these which are cheaper to policies on comparable insurance premiums.

There are also some other categories that are exempt but which are not relevant to business expenses.

It’s worth noting that while IPT does not apply to premiums where the risk is located outside the UK, other countries operate similar taxes. France, for example, has a much more complex framework for its equivalent, which starts with a baseline of 9% but can go as high as 33% in other cases.

Is it Possible to Recover Insurance Premium Tax?

Owing to the way that IPT is paid directly by insurers, it usually cannot be claimed back.

Why Does This Matter?

The biggest question of all, especially as IPT is handled before it reaches you: Is there a reason to monitor this?

Ultimately, the reason to pay attention is this: It’s always worth knowing what goes into any business expenditure, and any business will be dealing with insurance regularly. If you know what IPT should be for your policies, it may help you judge the value of different policies more accurately.

The post Understanding Insurance Premium Tax first appeared on ICS Accounting.

However, payments on account have also caught out many people who use them; if you miss one of your deadlines you can create very similar issues to when the tax bill comes due.

As such, we decided to look at the most common questions we’re asked and put together a quick guide for those who may be wondering if this is the right move for them.

As always, if you think yours might be an edge case based on the information below, we highly recommend consulting an expert directly to avoid any costly mistakes. However please be aware that when HMRC requires payments on account, they will make sure you’re aware.

What Are the Benefits of Payments on Account?

Simply put, by paying part of your tax bill in advance, you benefit by reducing the impact of each payment on your liquidity. It’s a very rare business model where two smaller payments aren’t easier to manage in your cashflow than one larger payment.

At the same time, HMRC benefits, because they receive part of their revenue early.

Payments on account are usually split into two instalments, each of 50% of your previous years’ tax bill.

Who Must Make Payments on Account?

HMRC will usually require payments on account for taxpayers whose income is mostly untaxed at source.

This means that if:

• You paid £1,000 or more in your last self-assessment tax bill
• Less than 80% of your income is taxed at source (PAYE, etc.)

You will probably be making payments on account.

When Do You Make Payments on Account?

A common misconception is that while the final payment is due at the usual deadline, the other one can be paid at any point beforehand. In fact, both payments have set deadlines.

• 31^st July – pay for half of your previous years’ tax bill at the halfway point
• 31^st January – Also pay the balancing payment for the previous tax year

A balancing payment covers the difference between what you’ve already paid and your actual tax bill. Ideally you will know if your balancing payment will be significant well in advance, but we recommend keeping a close eye on your financials to make sure!

Also important is to check that you’ll have enough liquidity on the 31^st of July for that payment too. Essentially this adds a second point in the year where you will need to carefully manage your cashflow, but the amount needed should be lower on both accounts.

What to Watch Out for When You First Make Payments on Account

The biggest thing to realise is that the first time you become eligible, your tax bill on the next 31^st January can be much larger than usual.

Effectively you’ll be paying both your previous year’s tax obligations and a 50% advance on the next year’s tax obligations at once.

What Do You Do if Your Income Declines Over the Year?

If you anticipate that your income will fall during your current tax year for whatever reason, you can apply to HMRC to reduce your payments so that you don’t end up overpaying. This can be done through your online account.

However, care should be taken here; as always, underpayment of your taxes can cause issues, including in this case HMRC charging interest on your payment shortfall. This will increase your tax liability overall.

If you have any further confusion or simply want professional support maintaining compliance with HMRC, please get in touch and we’ll be happy to help.

The post Understanding Payments on Account first appeared on ICS Accounting.

So what’s the difference, who has which responsibilities, and what powers if any do they hold?

The Company Secretary

Let’s begin by clearing up one of the sources of confusion; a company secretary is also often one of the directors picking up a key responsibility.

They can also be external to the business if their skills are not found inside it or if those with the relevant skills inside the business simply don’t have time, because the key responsibilities of the company secretary include ensuring that the business can show compliance with all relevant legislation and with all terms laid out in its own Articles of Association.

This typically includes overseeing the accuracy of accounts and tax reports submitted to HMRC. The company secretary also acts as a liaison between directors and shareholders, ensuring shareholders have access to relevant information in a timely manner. It will usually fall to the company secretary to organise general meetings and ensure that key stakeholders are informed and coordinated.

All of this ultimately stems from the secretarial duties associated with the position; a company secretary will either undertake or oversee record-keeping regarding all business-critical communications.

The Company Director

Company directors will typically have a much more hands-on role in the business. An effective company secretary gathers, compiles, and distributes information; an effective director acts, shaping the direction of the business, making key decisions, and so on.

While the company secretary is responsible for ensuring compliance can be shown, the legal responsibility for actually doing so is in the hands of the directors. The final responsibility for information sent to Companies House being accurate also belongs here, which is why a director will often take the role of secretary as well.

Requirements for the Roles

As discussed above, anyone can take on the role of company secretary, including an accredited, trustworthy external organisation.

Company directors must be 16 years old or older, and may not be disqualified or otherwise prohibited from being company directors. They also cannot be un-discharged bankrupts.

If you’d like to discuss this further, or if you want support in forming your company, why not contact us and start the process?

The post What’s the Difference Between Company Director and Company Secretary? first appeared on ICS Accounting.

With traditional holiday time kicking in, our office blog has a schools-out feel this month, with several members having a fantastic time at the European Athletics Championships in Birmingham. Sterling office stalwarts never took their eye off the ball, achieving our full FCSA accreditation renewal, and conducting some very intriguing staff polls… We’ll share more about some of the team, and how our Gratitude Gallery initiative ended in rousing style. Whether you’ve been holidaying or holding the fort, we hope you’re having a great summer, too!   

Office News 

Accreditation by the Freelancer & Contractor Services Association (FCSA) is the UK’s gold standard for compliance and ethics in the contractor labour market, your assurance that accredited payroll providers, umbrella companies and contractor accountants have passed rigorous annual audits by independent legal and accounting professionals to ensure full UK tax compliance. We are delighted to report we have passed all four of our annual accreditations: Umbrella Employment, Limited Company Accountant, Self-Employed / CIS Contractor Provider and Professional Employment Organisation (PEO). It’s easy to check anyone’s accreditation via: https://www.fcsa.org.uk/directory-of-members/ (you’ll find us there!) 

Senior management whisked themselves away for a strategy day outside office distractions. It’s incredible we’re two-thirds of the way through the year; having strategic and stretching goals in place is what keeps us ahead on providing trusted care and compliance, as well as continuing to expand our wraparound services and members’ benefits. Watch this space!  

Gratitude Gallery: 

Sadly we’ve come to the end of our Gratitude Gallery initiative, a phone-based photography gratitude practice designed as a mood-boosting creative team activity.  The last group “graduated” with some captivating moments including views, family, pets, wildlife.. and a mouthwatering croissant! Everyone found it beneficial, and we will aim to continue stopping, noticing and sharing. Huge thanks to Ginny Koppenhol Photography for facilitating. 

Talking about focussing on the important things, ICS New Business Executive Jasmine shared her learning that being present with the people who matter most, is just as important as being present at work. She took time off to celebrate her daughter’s birthday, and share some quality holiday time. Work is important, but making time for yourself and the people you love are the moments you remember the most, and keep us refreshed and ready to go in all areas of our life. 

Getting to Know Us: 

Our Sales Manager, Alison, has just celebrated four years at ICS. Her journey, from Business Partnership Manager, to Senior BPM, and now Sales Manager, illustrates Alison’s trademark dedication and sheer hard work. If she pauses long enough from back-to-back meetings on the road, she might just hear us say congratulations and here’s to the next four years! 

We asked Jasmine what life was like, a month into her new role as ICS Account Manager. She said: “I love speaking with consultants from so many different agencies, and have already built some fantastic relationships. My role is all about making life easier for consultants by supporting them through the process of registering contractors for umbrella payroll, helping to take the stress out of their day, providing regular updates and ensuring every stage of the process is managed efficiently. I find this role incredibly rewarding, I can’t believe how quickly my first month has flown by!” 

Would You Rather…? 

With a holiday feel in the office, our internal social team kept team spirit up with a few Questions of the Day. So, would you rather: Change one thing from your past, or know your future? We can report a 90/10% split for going back and amending something in the past. Wanting to change the past often comes from learning hard lessons: mistakes, pivots, and “what ifs” can teach us how to build better processes for the future. The best financial and business decisions aren’t always about predicting the future- they’re about having the right advice and information when it matters most. This is why so many agencies and contractors choose and trust in ICS Accounting. What would you pick: past makeover, or future heads-up? 

As autumn weather starts to hover on the horizon, one thing we can predict.. is unpredictability! With a dedication to trust, care and compliance, we’ll keep making life good under the ICS Umbrella. If you want to check what we can do for you, just get in touch.  

Best wishes,  

Your ICS Accounting Team

The post Holidaying or Holding the Fort? It’s August at ICS! first appeared on ICS Accounting.

As an influencer, you might monetise your work through brand deals, sponsorships, host reads, streaming services, video platform revenue, subscription services or any combination of that list.

With so many revenue streams, such variety in jobs, and so many other possible questions, keeping your accounts accurate and compliant can be a full-time job of its own. Here are some key elements we recommend you watch for.

Do Account for Every Stream

There’s a persistent bit of tax misinformation out there which states that if an individual revenue stream is below a certain threshold it can safely be ignored. Needless to say, this is untrue!

All the same, whoever first spread this about was clearly very persuasive. Many people still believe this claim today, and it can create major issues for them once they start filing incomplete returns.

Know Your Expenses

If you upgrade your cameras, microphones, or lighting over a tax year, these would certainly be allowable expenses. The same would be true for ongoing subscriptions relevant to your work, new editing software, and a number of other items.

However, if you’ve bought something both for your professional work and your own use, and if you’ve spent enough that you might exceed expense limits, this becomes more complicated. We recommend consulting someone who can advise you on specifics before you make major purchases that might be affected, and don’t forget to keep a running tally through the year.

Be Ready to Register for VAT When You Need to

If your total turnover exceeds the VAT threshold in a single year, or you expect it to do so in the next 30 days, you must be VAT registered. As that turnover could include many different, tiny streams, keeping track of it is essential until you actually register.

At the time of writing that threshold is £90,000.

Understand How Business Structures Affect Your Bottom Line

As a sole trader, a partnership, or a limited company, the way you pay yourself, your tag obligations, your profitability and your personal liability can all vary. What company structure you use is a major decision factor as a result.

More importantly, these factors are influenced by your income, your expenditures, plans for expansion and even your tolerance for financial risk.

We strongly recommend discussing your situation with an experienced accountant who understands your field before making a decision. Why not get in touch to find out more?

The post Accountancy Tips for Creatives & Influencers first appeared on ICS Accounting.

Early on, you can track your finances with Excel or in Google Sheets. When you start paying employees, you can still fit that on your sheet. At some point, though, there will come a point where a spreadsheet doesn’t give you the fine detail you need, and you need to invest in better bookkeeping software.

As a firm of accountants supporting small businesses, we deal with businesses exiting this stage on a very regular basis. That’s why we feel qualified to say:

Don’t do this.

Why not?

There’s No Double-Check

Before accounting moved from paper ledgers to software, the term double-entry bookkeeping emerged. When you add incoming revenue or outgoing expenses, you’ll enter it twice, and this provides an opportunity to check that it was entered correctly the first time.

Some modern accounting software allows you to do things like import PDF invoices or scan receipts directly into the system. Even then, there’s a cross-check to ensure that the totals being recorded are right.

When you enter figures into a regular spreadsheet, it doesn’t necessarily cross-check them. Just as importantly, if your calculation formula has an error in it, the only way you’d know is if it causes an error message. More likely, your spreadsheet is just going to show you an inaccurate number, with no good indication that it’s inaccurate.

It’s Not Compliant

Perhaps it would be better to say, it’s easy to become noncompliant this way.

The threshold at which you must enrol into Making Tax Digital dropped this financial year, and it is likely that either in 27/28 or 28/29 it will drop again. Small businesses will be dealing with Making Tax Digital earlier and earlier in their growth.

Overall, we have to say this is a good thing. The Making Tax Digital initiative is encouraging better financial hygiene in small businesses and giving business owners, stakeholders, and decision makers a clearer sense of the monetary impact of their decisions.

That means you can move away from bad decisions more quickly and put more weight behind the tactics that are working.

Spreadsheet accounting will not cut it in a Making Tax Digital world. Your information must be accurate, up to date, and it must be submitted in specific formats. However proud you are of your spreadsheet wizardry – and we do respect an XLOOKUP executed correctly – the simple fact of the matter is that spreadsheets aren’t designed to do this.

It’s Time Consuming

One of the other benefits to modern accounting software is that a lot of data entry becomes automatic. Invoices can be automatically filed, payments noted automatically, payroll systems are integrated – so much manual work has been replaced, which both saves you time and minimises the chance of error in entry. This is a huge benefit.

It’s Never the Best Time to Switch

The whole myth of using spreadsheets early on is built around the idea that once you hit a certain point, it’s the right time to switch. In practice, transitioning from spreadsheet to modern software requires you to learn new habits, unlearn other habits, and transfer a significant amount of data from one system to another.

As your business grows, this is always a huge time investment you can see coming, and the temptation must always be there to take a look at that time investment and put it off. Businesses that start on Excel end up with a perverse incentive to stay with the old ways for much longer than they should do.

Far better to start off the right way and get into good habits from the start so you don’t have to unlearn them later.

We hope you’re reading this article with time to make the right decision from the start, but we know that some of you will already be well embarked on your spreadsheet and wondering how to transition.

If you’re dreading it, why not give us a call? Having the support of experienced accountants will make the process much more efficient.

The post Beyond the Spreadsheet first appeared on ICS Accounting.

The post IR35 FAQ first appeared on ICS Accounting.

As well as more heat, July brought us a change of Prime Minister! With new cabinet appointments and impactful legislation from the off, we’re poised to be your assured accounting and trusted compliance partners, whatever financial, employment and regulatory changes follow. After the highs and lows of the World Cup, we’re looking forward to the European Athletics Championships coming to Birmingham, while enjoying a bit of golf, football, horseracing and cow-whispering- read on to find out! 

Keeping Our Cool: 

With lollies and ice creams keeping us refreshed in the office, it wasn’t just the temperature testing the ICS team… Megan’s rail journey to London took an unexpected turn thanks to a herd of cows on the track. With “helpful” comments and advice from the office, mobile working saved the day: a day that involved a 6-hour journey! 

An example of how invaluable earbuds are, and so frustrating when we misplace or lose them. Jamie-Alice was in this position until hers turned up after 3 months in the cold, rain and scorching sun of the garden; even better- fully working! A great example of resilience, which we build into ICS compliance frameworks, policies and safeguards to withstand the twists and turns of the real world- without missing a beat! 

Out & About: 

After an ad-hoc lesson in cow-herding (thanks to the trains), Senior Business Partnership Manager (and glamorous cowgirl) Megan led the charge, including visiting partners in Birmingham, London, Stockport, Warrington and Manchester. 

The annual FCSA (Freelancer and Contractor Services Association) conference in London is always an invaluable opportunity to gain key regulation and compliance insights and takeaways, especially with the current political changeover. The ICS Senior Management Team enjoyed catching up with fellow professionals and joining the conversation, thanks to the organisers for another great event. 

People News: 

Welcome back Karen to the Payroll team, and huge congratulations to Kieran, who has passed his probation with flying colours! Becoming a valued member of the team, plentiful feedback from clients highlights Kieran’s care and dedication to building personal trusted relationships, a brilliant achievement so soon into the role- well done! 

There must be something in the water: after joining the business just three months ago as a New Business Executive, congratulations to Jasmine on her well-deserved promotion to Account Manager. Particularly enjoying being part of a supportive team, Jasmine is already building strong relationships with our agency partners and becoming someone they know they can rely on. Providing swift and direct access to your account manager is something that sets ICS Accounting apart; if you need us: just get in touch. 

Drumming Hooves and Laying Down the Beat 

Surprisingly, we occasionally allow our hardworking team a few hours off for good behaviour, and they made the most of the summer weather. Megan headed to Chester races, while Alison hopped on a plane, chasing even higher temperatures before seeing Foo Fighters live, a real “bucket list” moment. Thinking decibels not SPF, Kevin’s journey back into making music saw the delivery of a stonking new drum kit- we hope he’s got understanding neighbours! 

“Hole” Lotta Fundraising Fun 

Thanks to payroll software specialists My Digital, who hosted a fantastic golf tournament at Carden Park, a great opportunity to break out of the office, build relationships, and socialise in a relaxed setting. We also had members in the winning team! This month we were also proud to sponsor a hole at the Scott Aerospace Ltd – SARTAN GOLF Charity Tournament 2026, bringing hundreds together and raising thousands of pounds for the Alzheimer’s Society. Days like this take a lot of organisation, so well done to all involved! 

Gratitude Gallery: 

As our Gratitude Gallery initiative comes to a close, its effects on people’s outlook continue to spread. We loved Jamie-Alice’s observations and pictures of a dog that definitely looks more like a goblin! In the mantra of “do something every day that scares you”, Alison was asked to sing the national anthem at Flixton Football Club’s opening game! In front of around 2,500 spectators, being introduced by the legendary Alan Keegan, iconic voice of Old Trafford, made it even more special. Rounding off a memorable day, her daughter also stepped up at half-time to take a penalty in front of the crowd. Well done to everyone involved in bringing Flixton Football Club back to life, rewarded by a 3–2 win! 

Onwards & Upwards 

We’re very proud that we have been shortlisted in three categories at this year’s Contracting Awards. A real demonstration of the best practices and providers in the sector, and everything we strive to do for our clients, congratulations to our fellow finalists. A huge thank you to our clients, agency partners and contractors for your continued trust and support; fingers crossed for the final in September- we’ll let you know!  

With a fantastic reaction to our new ICS Umbrella Plus, we’re excited to reveal we’ll be launching another offering specifically for Qualified Social Workers in the coming weeks. 

Wishing you a great schools-out summer,  

Your ICS Accounting Team.

The post Facing our Fears, Braving the Heat, and Herding Cows- July at ICS! first appeared on ICS Accounting.